With acquisition via an offer for sale that will see the majority owners of Union Bank Plc, divest their entire holdings said to be around 90 per cent to Titan Trust Bank, the over two-year old bank will now control the much bigger Union bank.
Looking at both banks total balance sheets and other factors, Union Bank stands far taller than its new owners.
In terms of balance sheet, Titan Trust Bank has N136.3 billion while Union Bank has N2.19 trillion as of December 2020 and is currently N2.56 trillion based on its 9 months interim results.
Comparing their shareholders funds, Titan Trust Bank has N32.9 billion while Union Bank is being backed by N264.6 billion in shareholding funds, making Union Bank bigger by 8 times when it comes to net assets.
In bank deposits, Titan Trust Bank has N85.9 billion, While Union Bank controls N1.2 trillion as of September 2021, over twelve times more than its new owners.
Comparing loans and advances, Union Bank has N809.1 billion as of September 2021 while Titan Trust Bank could only muster N38.9 billion.
In number of branches, Union Bank has 293 branches nationwide while Titan Trust Bank has only 6 branches nationwide with four in Lagos alone. Also looking at their ATM points, UBN has a total of 937, Titan Trust Bank has only 12.
As expected, Union Bank is a much bigger bank having been in operation far longer than TTB. However, when it comes to the acquisition of a company, age or number of years of operation is not the most important factor.
How much money the backers of Titan Bank are able to put on the table for the acquisition of Union Bank will be one of the determining factors. It is most likely that this will be a 100 percent cash deal paid to the majority owners of Union Bank who are divesting.
Regulators like the Central Bank Nigeria will always welcome new investors taking over a bank that wants to be sold by its core owners. This absolves the CBN of any need to fill in that gap should the challenges of the shareholders start to negatively impact on the bank’s progress towards restructuring.